Wednesday, May 28, 2008

Financial Fran flays Fiscal Fool


Good grief! Does Fran O'Sullivan really expect financial probity from the Fiscal Fool? Do we?
Anyway, cracking column today from Granny Herald's wisest of old birds concerning the buying and selling of 'state assets.'
Financial Fran reveals that last year Air NZ shares were worth a healthy $3-12 , and airline chief Rob Fyfe suggested the government reduce its 76% holding and do a little profit taking. But Cullen wasn't for selling.
Had he sold 25%, government would still have kept 51% majority control, while earning $820 million, enough for Cullen to buy his train set and its associated debt.
Now, thanks to growing oil prices, the shares are worth just $1.14, valuing the government's total stake at just over $900million; less than the billion-plus the government spent on the bail-out and subsequent capital rights issue. If share values remain low, the government would then have to downgrade the airline's value in the Crown accounts.
The point about this little exercise is not to rub Cullen's nose in the mire - the share price arithmetic speaks for itself.
The point is to ram home the absurdity of Governments wedding themselves to a "don't sell" position out of sheer political blindness.
Financial Fran says National should be able to make capital out of this blunder, but cannot when National now opposes asset sales.
Fran then notes the 'absolute scandal' of Treasury being bypassed over the Toll deal, leaving Cullen and his officials to finalise terms, and finance the eventual upgrade. And she concludes:
Cullen's track record of paying too much for assets (Tranz Rail) and failing to realise nifty profits when presented (Air NZ) does not bode well.
UPDATE: Blind ideology costs taxpayer another billion says Rodney Hide.

7 comments:

Anonymous said...

The OnTrack "shovel money to Aussie businessmen" scheme was lead by Mike WIlliams the labour party president.

Toll made several substantial donations to Labour.


Can we please jail them all now?

Anonymous said...

It's only a problem when the money comes out of your own pocket!

Anonymous said...

That cartoon almost lost me my coffee

tom hunter

Bryan Spondre said...

Little surprise then that business confidence keeps falling with such poor signals from Labour; http://www.interest.co.nz/ratesblog/index.php/2008/05/28/chart-business-confidence/

Anonymous said...

Financial Fran goes where the other journos do not tread.
She does a fantastic job in exposing the government's many weaknesses.
She must be so busy at the moment then!
But yes, the incompetence shown by the Cullender becomes ever more clearer.
Soon, even TV1 might notice, and maybe that young Guyon Espiner.
His older brother Colin has few illusions.

pdq

Anonymous said...

But yes, the incompetence shown by the Cullender becomes ever more clearer.

Why do you see only incompetence

when almost every indepentent commentator and investigator

sees mens rea and criminal corruption

FAIRFACTS MEDIA said...

While much of what Liarbour does is dody, we do need to see evidence of actual corruption.
Or National and other need to state clearly it is corruption.
I recall Don Brash calling Liarbour corrupt over them stealing Election 2005 and it was a view that resonated with many, pushing National upto close on 50% in the polls.
Then Liarbour dished the dirt and it was goodbye Don.
But yes, if the corruption is there, more mainstream commettors need to say so.

Of course, it is a crim of massive proportions for our bluindering finance minister to miss out on n easy billion which could have been spent on other things, or used to reduce taxes.
Or maintain public finances in a way that the budget did not push up interest rates like what happened today.